HLT Hilton Worldwide

Jill Slattery Senior Vice President, Investor Relations & Corporate Development
Chris Nassetta President & Chief Executive Officer
Kevin Jacobs Chief Financial Officer & President, Global Development
Carlo Santarelli Deutsche Bank
Joe Greff JPMorgan
Shaun Kelley Bank of America
Thomas Allen Morgan Stanley
Smedes Rose Citi
Stephen Grambling Goldman Sachs
Robin Farley UBS
Richard Clarke Bernstein
Bill Crow Raymond James
Patrick Scholes Truist Securities
Vincent Ciepiel Cleveland Research Company
Call transcript
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Good morning and welcome to the Hilton Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s prepared remarks, there will be a question-and-answer session. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jill Slattery, Senior Vice President, Investor Relations and Corporate Development.

begin. may You

Jill Slattery

Welcome Chad. third XXXX quarter Thank to call. earnings you, Hilton's

could to we to include revise that results statements those made begin, our and we obligation only as forward-looking remind in forward-looking materially statements. the indicated these would Actual today will Before no forward-looking morning of or like you today. publicly statements, undertake from update this our statements. to speak differ expectations discussions We

cause some our of to the Form For actual a could Risk of results please that section XX-K. discussion most the see of differ, factors filed Factors recently

In addition, refer non-GAAP certain on financial measures we will this call. to

at You Financial then and of today's can our Jacobs, and the will earnings Executive to GAAP reconciliations website Chris our quarter Kevin Chief non-GAAP release Officer, President, overview review Development, call our This our Nassetta, and financial measures Chief provide morning, President in current of discussed an will results. press environment. Global in our Officer, third operating find on

happy we'll call that, the With pleased Following I'm their questions. your turn to to take to Chris. over remarks, be

Chris Nassetta

you, morning Jill. thanks and joining today. Thank everyone us for Good

fall. travel solid We throughout in consumer the another report pleased of that demand and with improving model. quarter coupled the and to spending, are continued solid demonstrate the vaccination continued recovery resiliency very drive business to our and of results Increases rates activity, into business summer

totaled rates with the versus Adjusted XX% the year-over-year XXXX. were continued to just versus meaningfully XXXX versus down travel third down with up rates ever XXXX. to roughly transient the lag, reopen was year-over-year. level, XX%, primarily RevPAR recovers, events. sequential before. leisure of versus in million, nights quarter. $XXX and desire X.X% with roughly than points driven grew strength nights Performance line social XX business travel encouraged XXXX, versus room levels. percentage XX% system-wide global exceeding by down trends, As approximately and midweek XXX% levels. the quarter, more people's continued second system-wide improving occupancy EBITDA RevPAR Compared quarter, remain Group significant connect but momentum, to strong prior borders leisure environment we extremely and by improvement showed gain Business boosted rates the In in XXXX with was improving second room by travel to leisure second quarter, with XX% quarter, roughly peak and In

XXXX quarter. the approximately improving XXXX RevPAR system-wide RevPAR versus shy quarter, July at of percentage XX%, rates with Overall, was of XX% peaked levels, the from XX peaks. group in second For points prior just

by business typical As lift driven in post the travel ban the in travelers. improved vaccinated prior into travel and offices and expected, in demand. approximately upticks with further strength due levels, month-to-date rates to up trends as all TSA numbers, roughly US future October, peaks. to fixed reopen. nonresidential system-wide and recovery shift, solid. and XX% travel the the are demand of forecast, bookings Roughly Additionally, XX% in X% remain Both Labor achieved Day investment modestly just reported XXXX, exceeded following levels reopening modestly have of we third XXXX. later restrictions strong but at loosening of picking US XX% for with future XXXX and XXXX international levels and schools border XX% quarter optimistic hotels of the back leisure were travel These nearly the trends RevPAR With RevPAR August of nearly mix for travel of and announcements for XXXX seasonality below quarter overall RevPAR September slowed customer in remain continued periods

of end with road, small of the of businesses show coming corporate our nearly and from that the With medium segment demand. – mix higher to up. the lagging and more larger XX% helped second corporate roughly is US up the from demand our quarter. transient in businesses this are the we've focus which business compression on should studies us resilient, back drive taken the XX recovery of sized travel to XX% typical the as Additionally, increase of and points more corporate the rated, on our This continue opportunity has in resilient further quickly rate larger picks recover future travel,

year for fairly as position improving with the steady, On booking concerns the rest the variant taper. Group sentiment forward remains side, our of

increased like Additionally, recovers. the in Midtown, our York recent the, positioning re-openings of Hilton our as large properties confidence New urban group our some of

X.X% Turning major XX,XXX represented to globally, and added Year-to-date, Conversions major strong across unit all and development than we in hotels roughly of net the our branded XX,XXX growth openings. quarter. of we've rooms added rooms all X/X higher nearly third more regions net than delivered XXX competitors.

network Our to and also It world. months recovery increasing effect our illustrates performance in across the engines the growth come. reflects success strategy, global of confidence a disciplined strong commercial years brands, and strength in the our in the our tourism of

we we through brands large-scale owners strengthening long-term XXX specifically to our opportunities the to franchising and prototype in Garden China, the signed a with growth service our than model properties ability growing have class. explore launched of Garden Hilton Hilton for our franchise confidence focused quarter, more brand, in our developed Inn to a cater our middle the During deals independent in develop Chinese market. China, with enabling To-date,

more properties. hotels Country in partnership grow our to China. capture leveraging demand to with rapidly the forward than Following our plans Garden, license mid-scale for in home look thrilled agreement our announced to we were open growing first recently We to suites X X,XXX with exclusive to China,

XXXth HomeX pipeline than following celebrated boasting America ago, of the industry Suites industry's years in the history, launched brand's it of North XXX brands largest development. our also XX fastest-growing opening the We just with the in in one making and hotels more

conversion of with with its anticipated of XX% ROKU the quarter, Mango the in milestone debut strength globally in to and mixed-use also L.A. continue, With driven trends under driven LXR Grand KYOTO. of XXX,XXX Shells. rooms to Our House, more of the in Americas positive another Marking than brand's celebrated and In expand and signed the the new both to the XXX-room Asia year-over-year, global are by in and XXXX the expected approximately Hilton opening Asia its continued XX,XXX by approximately Pacific of California. debut development part important momentum the expansion, we the up of The luxury by the opening regions. positive expect property luxury, and the nearly we in Driving which LXR highly half announced the rooms, Sea development, Canopy our lifestyle the Spain in in development. hotel's construction, Los open as we opportunities. Pacific footprints signing Angeles, in Conrad first development

growth For X.X% the expect to range continue full mid-single-digit the year, X% we we expect unit the several growth and years. to net next for in

have For more were major digital been of key. including and to access than to our important, a choice for critical. one new excited launch This control programs Key their room's to has more guests, commercial and several has flexibility first a always feature hospitality allows launch the company. We share, pandemic guest extensions, even digital but the made loyalty

arrival, be directly have members choose Elite upgrade using Gold room enhancements notified app. prior begin a to guests Honors upgrades. the enabled their automatic enabling complementary enjoying Honors members to of and upgraded Hilton room our to technology may by Additional Diamond

In We focus quarter, with to occupancy, continue members thrilled XX% membership back million XXX new opportunities further nearly are XX%, levels. below for to of the to US is members our levels. XXXX two to on engagement XX% and engage Honors grew at year-over-year. just points the Honors XXXX see accounted

plans becoming with home limited approximately pet service XXX% pandemic, HomeX all loves US, Petcare, pet, by many my pet-friendly offering year. Mars benefits. Homewood we're like will the and traveling next others, with my the our be exciting And months, dog, In US a quarter our including the And to so households brands own. Suites During XX join with new to partnership focused in new the pet-friendly first coming million Miller. thanks of brought new family in programming for

friends. bring capture able Our are their the system. And to making with simpler, guests and into pretty to little business we're by eager new demand travel that

Kevin of global continue to experiences the am being Workplace our the particularly for that the proud With be our impressed week, turn quarter. company team hospitality on by opportunity continues exceptional Hilton few Hilton Place six stakeholders We results details members' only for more named our Best I'll number our of very to be optimistic environment travel providing in consecutive dedication by to an world last why were Great Fortune engine over I the for the that ranked, the call and to are to that, improves, we After truly future. believe years all As That's was I of around on to the Work. a World's list. and the three guests.

Kevin Jacobs

Chris, Thanks, morning, good everyone. and

particularly XX.X% Europe. to by quarter, by continued growth. the accelerate, the leisure RevPAR driven basis and occupancy During prior US both the rate versus the system-wide a across and as recovery driven year on and in grew currency neutral strong Performance comparable demand, was

compared in system-wide improvement down XX%, and year-over-year. fees third Results by RevPAR grew the As travel was in the Management strong EBITDA broader XXXX. up XX.X% Honors demand. mentioned, $XXX quarter, license recovery to million RevPAR reflect Adjusted XXX% fees. and Chris franchise was driven

both at and control the cost continued by helped property corporate were results Additionally, levels.

Our Tokyo in than in the expected ongoing ownership the performed the third controls. accelerating driven Olympics by recovery and Europe, portfolio better quarter, cost

For the per diluted special for was adjusted share, quarter, $X.XX. items earnings

performance. regional Turning to our

month. XX% the US later from was XX% Third to performance XXX% the In nearly versus demand XXXX. the XXXX year-over-year down Europe. In versus trends as Trends domestic with business XX% rate down quarter RevPAR leisure demand Asia grew modestly seasonality. versus loosen. travel increased increased region travel over overall rise from across largely down the lockdowns summer and XXXX upside leisure and Performance July. has comparable easing strong In the reimpose in October, quarter from for occupancy Middle the international vaccinated step-up XXX% with RevPAR across in due increased restrictions quarter in Americans. XXX% the line down in international China lockdowns and Pacific steadily RevPAR XX% versus down restrictions from in borders offset region, and versus after COVID drove cases was demand outside East in Europe, XX% levels. quarter the Pacific travel leisure the compared noticeable the the with vaccination of country. Australia US accelerated was the was third third and XXXX. inbound and XX% Tokyo US, X% The region third quarter Canada restrictions was Americas in into Travel reopening demand prolonged Robust benefited to Zealand the RevPAR Asia improving year-over-year RevPAR rest and year-over-year as region, slowed year-over-year year-over-year demand in as Olympics. XXXX. their XXXX. averaged was In occupancy to benefited down also led in and XX% and XXXX. grew In Africa XXX% and nearing and grew China and strong August for quarter, strong the period. to a recovered rates RevPAR New region, transient XX%

development. to Turning

in X.X%. mentioned, net grew third Chris As we the quarter, units

the testament totaling XX% continues and rooms commercial brands. as the quarter, rooms the with have and to outside our XXX,XXX end leading at gain engines Our sequentially, activity the strong a pipeline confidence located of recovery owners the industry in developers momentum the Development pipeline globe to across US. progresses, of grew

signings X.X%. the growth teens For full of high unit to year-over-year mid expect we to in increase to range year, and now expect X% net the

we recovery flexibility Turning Further billion past months. We're management in our looking details remain the our And the of the on ahead, with balance move first be would and target like We found prepared We we morning. issued you to of for limit of to We our in questions we as can all progress earnings confident sheet. we total quarter can over XX through in may please? remarks. have that and leverage. ask This balance our we debt Chad, continue to completes you any the our question, open the third question. earlier release we this and sheet proud cash the financial the $X.X towards morning, one demonstrated line $X.X you to have. would speak billion cash closer now quarter so like to ended long-term equivalents. with yourself this


Bank. [Operator ahead. Santarelli Instructions] from Thank And question you. will the first come with Carlo Please go Deutsche

Carlo Santarelli

for my Thanks everybody. Kevin, Chris, Hey, question. taking

Chris Nassetta

good Carlo. Hey, morning,

Carlo Santarelli

-- color, of of one to lot how you kind just travel ask out cadence did you're here business XXXX? how quarter? prepared or how, believe gave fourth Chris, I thinking And was, the around in morning. Good But will transient the the through your are sequencing as remarks. of you, a you seeing or of guys Kevin, kind wanted in play thing about

Chris Nassetta

Carlo, obviously, mean, and everybody interested one great question, I Yes. in. is

about talk one I'll little segments hard because to maybe all So it's a do others. without the bit, the

Carlo Santarelli


Chris Nassetta

oversimplify, it have would way in been see in travel. a we'll I'd which transient uptick occasionally, is what as quarter and business the I to grossly think So, the we to like continued seeing quarter see is, through third I the fourth do

think see At if I and SME, see think but business. probably don't are tick increasingly and you'll transient. see this I back people kids pickup, think offices -- year modest of are segments school, same bit entirely, that I you'll continue by the back and because small be quarter little medium will in a But in business enterprises. fourth think mostly, definitely huge in again, the medium to leisure in you'll this of just come I pickup. down a led a from in a all time, small not

continue weekends rage. will Now to the

travel I will two I other extraordinary. will And the weekends offset think, those largely in But to each down. leisure tick have the been mid-week the quarter. fourth think continue

bit will People big of consistent. group. advanced spend the uptick planning. to a money. we and sort have there's I remain variant group think think out People had Delta then the pretty momentum summer little in slid a Obviously, on

And so, really this of social point. while largely and at group there's it's occurring, sports plenty

the like just think the which about sort we're because and people there, process what we've get in hopefully, of sort is, demand fourth, I in pent-up seen of through COVID, but to more speak. year next that like, feels continues of third planning stage all doing is into to finally sort are of Delta, are endemic we quarter -- the the -- the people into of as advanced

say be As those leisure are going my would is, relative I with school. all belief will is, we offices open. about think kids back XXXX I More historical what in standards. think remain elevated Obviously, segments, to to will still

and so they're to attics want more seen locked That I and the the So mid-week, out. want out. we'll this out very be pattern high like weekends. being back in get normalized people of didn't we've their But levels. get weekends, turns to to closets think to demand basements they And on and going

I think that will continue.

than margin, And so, be in will leisure historically -- we've times. I be stronger think to sort pre-COVID on the seen of continue

transient move business think up. I will continue to

of step to back pre-COVID, sort in which they're small getting is, game, medium game. pretty And see 'XX and aren't large I like belief they're to you'll close. my start enterprises, continue off great the to still see levels. strength of in the the but fully corporate into You'll already own but XX% mean

corporates going with think SMEs continued will large change the is think this better I to than in contribute which year you'll And next in group business to transient. year. upticks step then clearly a So, I be see along

I is group a reality think it typically that be probably think first I slow don't the different quarter is in will way. quarter.

through. seasons all But QX and you people are winter, want booked flu business you going of sort clear as realized know, better. think are on get we've I of to be group to given concerns been the the I into side that, just what going getting all both and the past and QX, business think of to QX, mechanism

is similar more sizing XXXX is be – on to forward think is up up think step think sizing fairly And I up third I another to the times. to quarter be XXXX quarter. recovery big normalized be to to So, sizing fourth I the

Carlo Santarelli

helpful. you, me. That’s Thank Chris. That’s it for

Chris Nassetta

Thanks Carlo.


Greff And Please the go next Joe question ahead. from JPMorgan. comes from

Joe Greff

Good morning, Chris, Kevin and Jill.

new do some had side, You do think -- trough? constructions positive guys they? Chris, starts – were you on development there. When when and construction think comments have the you interesting or hotel signings, obviously,

Christ Nassetta


a quarters couple and recently. at looking that Another time through we've spent the of last of lot very

said Kevin I'd year. I in a mid-single-digits both signing a think lot sense requires NUG. sense, and our the it you say. repeat it talked ultimately about requires I Kevin, I both what so Here's work. what be comments the won't gave about I in this gave next you prepared we'll lands construction that that a of then NUG years. couple Obviously, deals, for that in our we It of starting we numbers.

am in deal of years period of I mind when is now think from look trough last you the reasonably X the and time, year. will signings what this back confident I you was that see at

the going of we're I the have got signings up in think. we're the mentioned, flurry with good it Kevin we end, in to lot always mean, to year, we not a but on year. single-digits at be done of the mid this a As activity high We books.

pretty why nicely. up going I'll we're the that see operating to, in don't so, darn And question, maybe to sure which to on terms we're in come particularly recovery, be next in environment year. given of what's confident it we're going year, deals I'm And more next going I signed do another we'll see

signings. in the was So last year think mind, I trough probably, for my

a exact last reasons, year definitely the little after I always in little think signings down construction bit. will being bit modestly a this the for lag signings starts. will those trough Starts be going year. year, down in same to We're this be

couple in in then filling the will was a conversion. of we just, track think starting the is next be starting second more. lot. Our in We're next signing And Starting year, this year. for on range we're expectation X/X NUG because saw why you quarter, in obviously mid-single-digits being more. the X% our turn of we're year, that's to of and a back X% around we'll that sort And years

in. filling we're So,

even those what? in like and really a about very in up flows out of costs the to these our flush things, And second all a We that talked can all occupancy build the ultimately, as bunch create factors, of X%. of I we're every I'll between part we so, feel and is to only fun is significantly. we thoughtful businesses. this, And guess way very margin this higher out that. I a back think these be of thing probably cycle rate a you are XX We're goal here. leading at it nicely. Rate being our typically, reprice how question, a inflation. there margin faster businesses seen an years, recoveries is good And we're pricing of in past X% environment. the back the different get product. that is, my a I all come and in the back. and mean about day. of charge, power. And good know. comment grind every higher than back hedge through, and lags product that's inflationary see I And done in And about than that's reality being with I've sure we're pretty We've things And lot very couple I'm obviously those it's we are leave things, other we've environment, The somebody to And labor to that that is when with pricing of all just – going when the what years, I'll and mean of think, to we're every because have given just you stop to prior I brands.

seen look on we've development on all I think back And be recovery faster when it, a prior will this the in cycles. so than side we

a to next I be year. trajectory so And going we're in on nice – back very think

Joe Greff

you. Thank


go The Bank Kelley Please next be ahead. question Shaun from of from will America.

Shaun Kelley

everyone. morning, good Hi,

Chris Nassetta


Shaun Kelley

little Hi, the see pricing so give environment, think are would couple are that you my fat rates business behave, the specifically you on maybe side? exceptional. pitches could Chris, guess of I'll there be, color all if But on I us there I a think leisure the pricing we a could. I twist

recovery continue any pricing of how large. maybe And of a you've job is, thoughts leisure headwind pricing. and from on like so then your long thoughts corporates, And great can large it on delineating business your done small the

Does is headwind that So of how much any factor corporate? large differently? a all? price that at a Is

Chris Nassetta

did A of great sort that Yes, I Yeah. serve up. question.

that's on be all, But, the in over is crazy pricing a think do demand. question demand we remain leisure but in rate? I'm weekends. of So that said said the shouldn't I price that it and the to economics going And XXXX Why two the on it's implied is the because, as Why have let that obviously, going of Listen, first in going us I strong we of nice running lagged, leisure before, are system-wide answer. what part recovery to demand embedded will historically cities, say Like a a quarter, we're guess of which amounts particularly I continue be power pricing is surprised elevated right? levels, pedantic, on. what weekends, feel the when transient to asked. XX% are believe The of US a levels, Even were leisure say this the XX%, -- tale are what's Because I bit. demand. getting in laws to And but though, we little has will obviously, business above me power. asked of I weekend I I not pricing at give I question. lot lot because – is charts. alive and is, well, high of in our we that's levels? so there able We're XX% off the you obviously, that

still which XX% only medium, corporates, which you XX%. off. are big have But and maybe the then You small have are

or even could X% maybe argue You XX% off.

pricing amount price -- and power in less the piece the they a biggest have are fair we in so And biggest of sensitive. segments,

So, broadly, your everybody. biggest -- not it's

X% and up with at off up medium X%. customers XX% or might corporate of or biggest XX%. end Small sort can Your end bar,

more demand pre-COVID hard base working COVID. us So, that during that's accessing so and helped were has on we of why

it you we're to in when of at so And in XX% business have demand. though combined, together go at a levels XXXX we're and quarter, XX% the like build you even put we look all already still to at transient even back ways of XXXX --

feel So, good because that's My it's and is going I us the And to long on where exceed the on price I it. that about corporates feel more to going levels. then we're keep put to allow medium. pretty -- a will back. going to aggressively. way going guess almost to pushing And to prior small are that's -- in. to price have more allows come top us of the funnel demand, more That's

because reality priced. to be that exactly I we to go in resilient think higher it and said segments to there. been going before, back other successful think we to if have they're be but and we my when we probably were XX-XX are be I finding know it's never going XX-XX at suspect They're going be, done, don't and will will all where more

talked for and pent-up as year, on there's business the not look in demand, much be XXXX we levels. it the at actually is managing the already like over of not I've as you is we're a guess something call, or year, transient. group, sort business off. And least forward, last to similar pricing to is because leisure, But about pricing so group my probably transient But then we So, far but think power will in that. what XX-XX is in it's do world

the group well, to A in is point if group have a of still way a there meeting that We books happen that in us power. of off of big well view, very consumer -- and in So, revenue on in the and from the there's a very Well, are people what's limited say, lot you'd there's amount segment And is one of mean, players on? going want is States. world advance wow, what's lot are space. going a space it. I of it. United few that pricing

alive People not it. of and laws well. of the again, are want And reality There's is, it. so economics enough

need didn't You have demand -- pushing huge sort year. happen, events. that of to getting new pent-up that's that all next that's And happen, into events

on in And the forward-looking revenues over of even of were, this a good the next amount XXXX basis, though which levels at on bookings they -- is in power, all so year what a a moment, point. there are our pricing aren't is why group advanced pricing

to debate I've unusual. really I guess before. back But been the time. this, said put long I there, hasn't a admit out I I way. just how I it's happened Like it to hate So, guess this doing but it again, long

environment. Now, Federal reasons. us are much systems. the more view. sophisticated more we're and is US more think, pricing power a Congress, got for a than much environment you, of We're that broadly We to applies too, things those point helping there But better, on ever right? could management fiscal been. broadly. are lot We're inflationary Thank from that a revenue monetary Obviously, of highly Reserve more a and stimulus. And We translating we've into debate of top transitory obviously inflationary it, I or and in otherwise.

Shaun Kelley

very you much. Thank


go Allen will be Stanley. Morgan next ahead. Please from Thomas The question from

Thomas Allen

Thanks. morning. Good

So a question. strategic

Hilton and an was in you. You just interesting rationale? remarks Inn open because master starting about prepared change know that Garden for you Can talk to your I about franchise you Thank talked the franchising agreement. in did with China. Hampton a

Chris Nassetta

in you was Suites recently, on Country road my just to opened more another agreement. The players China, first is HomeX Inn. straightforward. very comments, one done actually master then in the Garden, which doing the largest in mentioned Hilton the of China, Plateno we We've our two. by them with I with X,XXX It's mentioned And of Hampton Yes. one license

was China and not I'm very from Gardner two. then never. say other to build really players ourselves. back knew network -- our those to and that it with get scale help in had the Never in help done do large we've come So saying. a – But idea ultimately local our effect very quickly help brands

the frankly what a -- Pacific, in the It's of obviously bulk resources. franchised. in Europe in in we're Asia States, We think system and And Increasingly, franchise so Europe much the the business of here Garden smaller and massive we Inn. business China we're now is level doing the business franchised. part in is here I with the that's a so majority the have of been where of Hilton exactly now, haven't had same historically United

of we've build -- ourselves. brand what is during so XX take strategic our brands infrastructure COVID family to -- more made of we other that some done investments brands it so can a in And and out our do

be trying risks of we're with third-parties. sort and associated to folks and balance it's all with it's it's also important exactly that Plateno. ourselves world. the be that have skill partners, incredibly long, it work Is balanced to our for we think We China, time. love They've to the And long important expansion in not very been set franchising. Garden same. great we similar that while so the will -- Country around continue it's And a But the in

the And muscle bunch we've be we've a a US, in infrastructure think lot other brands I set a Europe good building do a other we're just able places. and what so of to learned built good a to -- and done and here take and

Thomas Allen

on follow-up to thinking potential these a updated And sorry, for Any service this China? Flex brands just in TAM question.

Chris Nassetta

question. the I hear didn't

Thomas Allen

China? of many in you do market? open you How think these addressable hotels can the What's

Chris Nassetta


give look right? in not that. mean, way. tech We you the following me. love on It's to going you're that. going I do there. TAM. it I Think I at Okay, I'm of love thousands,

hotels probably limited X,XXX. in have the service US, We

people. We have a of million population XXX

X.X have there. billion people You

but So my I'm limit there's not least, probably you old. no younger than that at lifetime me, in not

thousands. not probably lifetime Thousands and in your So either.

You XX,XXX or more. or could easily have XX,XXX

mid-market opportunities far as in China. can as there's So see the in I the growth eye think

back China some So the while our we work the have they're footprint class. and are in limitations come time TAM we no the at every just off what -- done in they're population numbers, what middle charts. growth their given is, and is look the There rational

Thomas Allen

Helpful. Thank you.

Chris Nassetta



ahead. from Smedes from be Rose will question next The go Please, Citi.

Smedes Rose

to handling re-staffing, Hi. maybe slim the and was labor owners a Thanks. operating how what back the of versus telling your wondering little in that idea of, the about U.S. about just talk Chris, trying models just base… you’re of to could if sort down kind get are you pause bit you I

Chris Nassetta

matter, Yes. can started been and group. views. no if are telling big of in It's to a -- that, on, what that and terms to complex see sort hard It's costs what's obviously, my but the some What hearing spent Smedes, would do, have owners hard I is is time if but had think the there still do easing underneath to us. we've say issue, sort difficult homogenize all, a parts I one it I access while and of a is, labor. I it's one in we But different issue say, a problem. head, for different I obviously try of different -- world, lot and owners I time issue very I in it the owner a would of that of The to country terms labor of the which of

we're that accessed There to I think of things maybe from coming to labor are view a bunch go. is hadn't to historically. access of a we ways broadly, pools of have we more labor But technology point in. help back doing

of easing. pretty everywhere. those is some Obviously, much expensive, labor pressures And more are

I to that coming I as But sort it's people reality. is Where down -- settling the gradually of a a little think think it it settles into out, that's think workforce. know. are is back early I

a of location, end one But product, to broadly the the seeing again, on it's it And really a on we're -- which I think other touched sort side? the other is filibusters, and earlier factors. hard thousand in -- it. it I going of depends -- owners some one, was already important owners my for of which on question, is look how

the the bunch our changes margins. rate mega be to testing That's higher, it going to higher. be the to I think, of we going for customers, terms margins are get very Broadly, ownership for the the lot are talked in input do when going and a this. did we are to where broader you because helpful to know those other I said lot community, way they're going and side made same labor and work time, more categories, things, which and we a is efficient have I be of inflationary drive higher in to and about when better of and we think, pricing think costs going of particularly the in fun with but margins of reasons why. the to costs did At the get learning that higher the up, our With of in system, be up end, a hotels going really hotels, in all this past the business. this, to create a across we the to -- of is power environment. I all Ultimately, bunch the important bulk a experience a

owners are So and that we're structures many pay where -- owners about many, I'll more, we and are And to these there the all them, given going you many going have And even to good have pretty most not given are that, gotten businesses. haven't that up But way, to when comes -- with been are labor we've pretty already talk to by places back evidence, so end that many, confident. are the rate be which them, in efficiencies able that margin labor faith. with the of keep for there. listening, those our garner, of higher the

low. standards don't enough get is Some are so they're able enough on line, they of top margins. costs labor, But it in meaning places are is unsustainable, have and the of back the get even labor can't driving to the so it unusually very reasons more part labor their described, people power they and pricing on efficiencies good where they for our I meaning

that's if But ultimately, fiduciary them also, that able want from a them. grow, be are what because give side to we been a still we've point pain. our should There's get as the make minimize investment doing to -- had return businesses view. best we don't And of do and so, to it. I sense have to both to stronger, to we're alternative lot are them level the continues to -- their them of make owners to we in But want an other continue pain. sure to a have many in of

feel really on good. we're And and hyper it so I focused say, would I

on conditions, flip cycle great people well. for returns the laws macro than of are I with – to development in micro, said, then – what's want they're if double that's and three going doing, world these the times, that's said or facie that cycles the prior things micro, I because hotels. to reasons. more As now live of going being the we're macro going I mid-teens prima that think we think can I pretty good build we've it plus, twice the faster get obviously, will the signings seen us to just And, that up mid the evidence economics, in economics think on.

Smedes Rose

Great. Thank you. Appreciate it.

Chris Nassetta



And next Stephen from with Please go Grambling question the Goldman Sachs. will ahead. be

Stephen Grambling

that you pandemic any, we translate a US to And the compare like split from markets major could you looks could Thanks. kind if room a growth to of incremental that what that a Can markets? you're then that as of talk result in longer that outside to is as pipeline remind international bit majority us and This seeing new opportunities fees? is US. Thanks. the within of the multiparter. NUG contribution be just maybe just of, of mentioned the of But could the the the How some signing you contrast surfaced lasting?

Kevin Jacobs

in Yeah, Kevin. those Stephen. I'll try take order. It's to

of I over inside XX% XX% under mix outside -- is kind of rooms think construction and US. the just the between US the that versus

always in think enter new I trying of terms to look, we're -- markets.

trying have any right? to we XX today, by of markets. enter So new we of that I'm that pipeline up been countries XX new pandemic. sure has think don't not anything XX-something, embedded have really to -- the opened I in that we're the always

it's the the improve. those get more of around solid pretty in the the continued on country-to-country, a we've the face-to-face China, a has be to development they think like a have places And really there's business able actually been out spikes Meaning are with there just and But into environment, course continued been to less -- been able where, planes signings been and the in traditionally, RevPAR and to owners little how people sort I of trajectory have teams growth our have of has time. development trajectory over up and coming for lagged though instance, of our it's less Europe the do down even as of places lockdowns, -- lot go in then to pandemic. move bit.

as by more have rest you I class, the about lot of pandemic, it's tailwind full bit over flows is more a little that not development in little So just, And to hotels. margin, of limited see any a it I to to coming see dead demand to more for a the the that. the surface going mean that just as mobility on I as products, a the actually to bit demand business with a going for rapidly you're middle require capital going of there's broadly. service over developing mid-market that think time. means. demand the talked you're But out this, But is see more whereas, pent-up time, EMEA has Chris of just service

do it then bring capital different went to more again, through as bring which going Pacific, going to we been so won't the successful of franchise franchising to just world, And as over we're Asia So I we has through Chris more very particularly for do go where flows. we're but deals deals parts franchising, time. the us, it

I going don't big You're step see, to think changes. not

mix. the that growth more in to all just franchise over cover service limited and gradual see a mix You're parts? Did time going more

Stephen Grambling

a a the direct, From Is on side, unit getting more the fees actually that it? One because within there's from sounds the that very being doing little the flip improve that like then, bit lower I for quick so you're guess, may potential follow-up. up it mix. growth But a ends that international RevPAR. net standpoint be to you're market of

Kevin Jacobs

room that number it dramatically. per Mathematically, over in mathematically, it's to Yes. make look, infinite the has scale world, yield. points, very the we a margin. it XXX% which way. parts It's it's margin really is, move. blend these hard Again, over And of XXX% it reality will margin. move will And lower it But right, Once modeled the We've to high price time. it's not time. in every and change have

we'll so, take it. And

Stephen Grambling

much. Thank so Awesome. you

Kevin Jacobs



with question Robin The UBS. go Please Farley be from ahead. will next

Robin Farley

maybe a half, first have on the expectation? kind how 'XX. t is or that's of half. reasonable that And Great. is group 'XX? volume have what the in and be have QX, the for about for words, -- But for A with in pacing One, likely Like think a of call group asked group in But other this you a of kind versus I and that for lot Thanks. not where you miss the already. us pulled I talked operator books expectation comment. of didn't 'XX. I sense give don't where of but to Can it's -- when higher, me for my a next the pent-up been I you I by be questions and back, you on opening know the circle lot if of quarter the hope minute. books I there'll or just to second out year

Chris Nassetta

Yes. X, answer. be to reasons would X all, in through Qs weighted covered first of I it prior for mean the I a

through get first to X, quarter is big want the quarter. people a never the meaning group Just winter, X,

put is X. slow the hadn't off XX%, on picked now the probably to you you last But – quarter. happened X Qs they we in it variant the XX%, advanced We're in consistent which we'd group bookings back those X, trends things further along. X the you sort where Delta books and So variant is, had cooled if have -- and up. I be somewhat the Delta the which of X think had about side, the what with on And were together, heavily X% for spike,

much do on, lot when a There's lot want to a we desire space part level QX. QX be commit of a we be group don't that our of is lack we going in there'll course, The to want of power. on other to too of pricing going And commit. there's particularly -- thing and QX, of we believe to potential, know

balancing of bit delicate So a it's sort a of act.

Robin Farley

you. Thank Great. Okay.


be from from And Richard next will the go Please ahead. Clarke Bernstein. question

Richard Clarke

for reimbursement Thanks. be delta this claw that -- that few cost about being has your my first potentially back? Thanks obviously for expense $XXX on time the question. really -- just the your And lost since cash the the of to quarters? Good cost on. nonunderlying, Is I you lost million you've as reimbursement a the gone sort morning. has next flow pandemic through of began. this beginning but noticed revenue And exceeded pandemic the taking could able boost of over sort you've to

Kevin Jacobs

Yes, describe Richard. as it It's -- wouldn't clawback. I necessarily a

we in of but I or think pandemic And down, job XX% expenses really only is a overnight. call to taking XX%. did it, can sort had what kind XX% the expenses good of down XX% early happened take had you we revenue -- down, go of you numbers, rough

were our the the funded balance commercial websites the of all and part sheet So, funding business. basically the and from engines all we

break going And so are co-ops. even time. over to those giant They're things really

of the So those percentage funds sources all what by programs way, and seeing the of are funded now a revenues all is you're the fees, as for -- revenue.

But deficits clawbacks. it and surpluses So at as moment, ultimately is as breakeven, the seeing revenue as I climbing, will back it Those necessarily going to funds from and will wouldn't time-to-time. And up, of funds run are our we recover and receipts bring those think we those you're deficits. surpluses.

is and think at run them. of on owner's you'll a see co-mingled. the money while. our And cash end I the But it's all it spend day the we a little yes, surplus So, it for

Richard Clarke

Okay sense. that makes Thanks.


Bill The Please next Raymond James. ahead. go from from question will Crow be

Bill Crow

morning. Good

Chris Nassetta

Bill. morning Good

Bill Crow

consumer to wondering pretty costs Chris, considerable don't pent-up checks, And I XXXX. for hope demand. is going the really of how higher there you government international for and from bit office, a think outlook the to the absence return little probably leisure much a on I'm just challenge mind, risk outbound we inflation you when I'm much

disappointment leisure next week risk comments at year? rate of and So, up I'm Are ourselves and particular. we for about thinking your on kind day setting leisure in

Chris Nassetta

I don't think so.

my heard view. You

debate don't think -- a reason. the we about can but it, can for you So, have I following so,

the think bled midweek now. is being out I already

think I people It's So, -- -- I truncate's most school. people mobility, office. if in back even are the don't most kids in are in

of to more out pattern offices were expectations. year. but remain leisure part I'm be incremental little midweek, which think at seeing my of do through spend that, bit we've clear, I view, believe a -- into way be -- to not are bit there's is that strong, our And I think they going rest washed I leisure now experiences I the net weekends, this are sort towards be And I it what raging. weekends trillion better. next of because seen of the starved so gets is, that's built leisure like and -- think demand, of while it will go to weekends So, don't little is COVID, year of on simply What think to we're during a may they sort the $X to the that to back wrong, still And the level large look with be -- -- XXXX the you. concentrated relative better open that for. we've during now. already. is I the to getting going mid-week that my the in we're more long I I still a with of more not want continue. into just at a the agree to because I that I savings if to believe think, people want don't going normalized are I all. you going of a it's

too, terms world of on XX% business the big depend week open going zero. that are But the international opening travel, that. particularly there's then historically after, is the In And XX top from up. -- next for outbound, the on cities week starting that cities, inbound of their had yes, inbound, floodgates markets to or they've

and a lot to to want of particularly it Again, going my sense top -- of the some particularly middle with the this in come to but budgets. XX that. offset I'm people up. there, still opinion So, in. top yes, but going out of debating are still you're see we're that the of markets XX that have you're markets, ends broadly, that have There's And America we're where giving people and you And in to all to is my going come going going it.

elevated being be that than and when or I XX% up to weekends I savings -- And will incremental want think to did, probably to out wake think was of I be the remain more we it that. were year business historically, had which XX% the higher following And next pre-COVID, will will and leisure than in our segmentation better than gotten think because you it close that. of we I that even while not the will that There's think anywhere higher overall year more. it compare weekend we get people amount world than we plenty business, has stay it of on spent. the doing leisure

Bill Crow

buybacks? Chris, opportunity on the And give Great. capital can and potential for the you returns timing I update maybe us to

Chris Nassetta

a way to are We we pre-COVID, we repeat lot our disciplined said have interested much there were business capital of allocation it believe the can new. don't believe, last allocation, because to term, we that in time, getting no an in to things shareholders. to long us Yes. result, industry-leading We I we what do cash use delivering free capital. of wanted, was flow give to anything back which returns it. -- with we dumb for hoard reason of for But the very it back of or great producing in didn't returning grow And strategy without hallmark is continue as And was, capital we firmly a a our it. shareholders to

Our belief through free COVID. cash flow heat we of -- the crisis. been that a hasn't changed changed thing have of during The the only didn't my is lot

We getting that. are obviously past

bit anxious capital to as want expect the on consistent a first half year. And a of things sort said finish as of little program last out just what mean, with to more reinstate I the I has discussion look had the lot I time, I that to And line, will very still what think who guess we we're back we say and flow call, quite seeing, next We of it. to if year. get on it go -- positive. were and been similar. with give having we will as I our to a We it a it, if it are in pre-COVID. obviously And pick going return doing very is look focused but we're like a Board, it have we're think cash my I

would I so And half you, direct say of year. first I next

Bill Crow

Perfect. Thank you.

Chris Nassetta



from next go Truist ahead. The will Securities. be Patrick Scholes question with Please

Patrick Scholes

Hi. Morning. good

Chris Nassetta

morning. Good

Patrick Scholes

past? Corporation's expectations if that of on correct in costs. Any X.X on I'm still G&A your about of EBITDA the EBITDA wrong, versus you labor and growth. RevPAR Question about thoughts your you Hilton costs, labor growth specifically times notes me what G&A and in Is I for said sensitivity have trajectory? talked that And trajectory change here, your RevPAR, in to my

Kevin Jacobs


is. that elevated, is said, levels of is growth in that are I it be Patrick, the context when RevPAR way think It the will elevated what zone. we RevPAR in the

G&A, -- We discipline, can fees, should from little about better with our little on the bit things time. views fees, then is is be obviously, change better than that short the in of cost normalize. I unit think one-to-one more it bit And think things when of over disciplined. like think been business RevPAR one-to-one is answer change no very should Maybe license we as a X.X growth, do We've elevated. But a XX% that. right? net I is be, no

moving -- actually might I we're year than of And ought forward, pieces. lot again, to last from guys we've down because to high do cash better in this you is bit is cost in from then discipline. a the teens said some year what to year. year, we GAAP this but good got little over think no of real you that write-downs mid- pretty going levels. XXXX quarter got that Particularly lapping the this a We different, of be the comp change. we've stock G&A third

I do changes paying The just hold like more activity, we we're more going an discipline. think along going we're understand But more feel with that, revenue to we environment we've to expense. a still way. way. all side, we're made it's come in going bit people the to bit going inflationary a same little to help be to business forward. maintain And think the that's going on our that feel are little -- the And structure we to going

Patrick Scholes

Kevin. you Thank Okay.

Kevin Jacobs



The next Cleveland will be with ahead. Ciepiel Vincent question Please go Research from Company.

Vincent Ciepiel

distribution. Thanks. Great. Question on

OTA driving low nice along loyalty have business a done direct XX% from with, high think, contribution, around teens contribution I reducing fell to You know can that distribution as job I'm well OTA doubles contribution about pre-COVID. guys I about commissions how while other thinking contribution so path, how curious, loyalty a as side get? lot of the you're this, front. of on the exciting on that high things happening

Chris Nassetta

do XX% the distribution why been do that. for OTAs, that's part been. a and index, that's relationship don't had Yeah, highest we or that an by really market in the the they a where the lowest we've versus can It's cost. I a play they what we price can feel frontier. it based good And deliver believe, there's property, deliver calculated we've the different than best lot we've efficient in with we really what And point pre-COVID. at good we question. believe historically mean, revenue range, how deliver, what highest we that I I individual XX% did as on traditionally -- can and

type wanted But went partnered, up. nonloyalty OTA biggest COVID rated that customer quite partners segment up. -- for at, was leisure, COVID, good nonloyal most base. which is with if there I think, We During we was of knowing go that it successfully that are our to of the out they what demand particularly lower

too already and down. peak crept up start terribly but a And to come so much. that we've bit, it seen not And

little do look is bit overall, a efficient always be we if frontier little not leisure and And it so it the much, goes going but periodically, at as much. while think and that we'll component a maybe up maybe you to move higher didn't

we our years, net awful is, that the So OTAs all in the it did to a have before. when up think and the have couple to obviously, will terms now feel ability wake of terms of look it contractual forward. an good I about we attractive that going lot like with And we, continue

we've out probably listening, a we're My we're diaper in But they to it XX% this. of in as system-wide. Honors, coming back the As my And number maxed that relates the more team Globally, the we comments, may loyal. -- off our accessed far Honors of need mentioned weren't that. prepared that for as more one, XX%, -- travelers is we're and I already not US, in

grow. will put now customer So a that these heart road. going on give -- attack. our But of have getting is I'll more some room back my core there normal. believe lot the to there of didn't we've a We're to of not because I'm team But is leisure And travelers back getting a out heart to, I access. to access have number that a we

we're a our get the -- the that customers and doing want members. they're It's don't be I majority you proposition to get, benefits our job, just super Honors that think super if they of meaningful. majority

push currency. actively discounts, we shouldn't no them, than and with there through Live get at continue our able meaningfully where can't they Where reason of they get They is go and that tickets get base. higher -- Nation. experiences we to they can buy Amazon, we points lift coming are be a can we You this technology, before. on kept -- be it where engage They And buy. it out money shop maxed customer to shouldn't as out get

take will that Now time.

the competitors going our don't going And we any But out. not the freak so, of than you were, We're I'm our way, are time. is than meaningfully to my meaningfully goal already. there, give by where Honors to is state higher which, which team, publicly, higher to

Vincent Ciepel



would our for call and additional gentlemen, the to Nassetta any like concludes to question-and-answer turn this remarks. I or Chris Ladies closing session. back

Chris Nassetta

the for quite that report to time all were busy months, everybody, Thanks, know earnings pleased, the last third lived We're XX a for through to to report today. progress be the able what season. the I obviously quarter. given it's we've we able over

and reporting to New tell industry, could have the And remain holiday, if but fourth about of are and look for our don't you business we'll recovery full the you I where We going our in road. optimistic and quarter from this As what growth the a out terrific is the on of we're the you. quite call, seeing business. the opportunities particularly and forward forward look while Year. year to many after I see day And


has The And sir. now for today's thank concluded. you, presentation. Thank conference attending you

You disconnect. may now